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My advice is to manage your expectations. Many people want a house in London, a place of their own etc. but with a 40k salary that is just very unrealistic, unless you're looking at a flat in Zone 6 and even then.
yes, keep saving and find ways to increase your skill set which you can then utilise to negotiate higher pay. I have friends earning £100k+ in London who still feel like they can't afford a property in London by themselves.
IMO you may be better served in another city - on a £40k salary sounds like you aren't really getting the London premium, and may have a similar salary elsewhere but with way more buying power.
I earn over 100k and work on London, a while back I looked into buying a pied a terre (2 bed flat and rent out 1 room) but the issue was most of the affordable flats were in dodgy areas. It's even worse when you are talking family properties. With the rise of WFH/hybrid working I've given up on that idea.
This has absolutely nothing to do with service charges, and everything with the fact that you pay the same for a 2 bed flat as you would for a 5 bed mansion in other parts of the country.
True, but add £8k of service charges on top of the price of the house and it starts to also have something to do with service charges. I know a lot of people who don't pay that in mortgage yearly. Not in London of course.
OP, I bought my place in zone 4 on £42.5k but I had double your deposit. And it's a 2 bed flat, nowhere near a house. A friend of mine bought her place on the same salary, but it was a 1 bed shared ownership flat in zone 2. There are ways to become a homeowner on youe salary, but very few ppl start with a house. Aim for a starter home - a 1 bed flat or maybe even 2 bed further out, but be prepared to save more or move further out to achieve your dream of having your own place. And bear in mind that potentially a new government could result in new ways to achieve home ownership in the near future.
Yes. It is a lot easier to buy with a partner too, but I do understand wanting to buy on your own if not married (though most people I know ended up just buying with their partner unmarried as it was too expensive to do so alone, and they were on higher salaries than £40k).
I have a friend on a similar salary to you who bought through shared ownership in Croydon - that isn't for everyone but his attitude was he just wanted to get on the ladder and preferred it to renting. I also know another friend who bought with her girlfriend in Brentwood on the Elizabeth Line and it was a lot more feasible for them there. So there's options, but you don't necessarily need to rush into those options if you're happy at the moment.
Do you see your salary increasing in the future at all? IMO your salary is potentially too low to consider buying alone in London at the moment outside those options listed above (shared ownership or moving outside on a commuter line) but could work a lot better for you in some other cities, but understand wanting to stay in London.
Frankly, saving is futile.
In the last 10 years, the average property in London has risen from £361k to £499k. That's £1,115 per month.
There is every reason to believe the same growth will happen in the next ten years, as the fundamentals (demand Vs supply) are unchanged, and that includes a long period (2018 to present) where there has been next to no growth in price.
So you'd need to be saving £1,115 per month to be standing still. That's just not possible on 40k, and buying is getting further out of reach.
The only answer is to earn more. The bottom line is quite simply you cannot buy a property on 40k in London.
Rather than saving you'd be better off looking for ways to get promotions, move industries, more skills, diplomas, certificates etc. Even if it costs you money in the short term, saving isn't the solution.
I'd say, consider moving out of London. You don't have to go prohibitively far out. Places like Chelmsford in Essex, or Reading are only 30 mins or so into London on the train, with trains running late into the night so you don't have to give up your London life and friends etc. But houses/flats out there will be a lot less expensive/accessible. You should check it out.
To add to this, Milton Keynes as well, not as nice as Reading imo, but decent (30-35min) trains to and from Euston, and you can absolutely buy a flat on 40k with 40k savings (within walking distance of the station).
talk to a mortgage broker to understand how much you'll be able to borrow
consider moving to Croydon
pro: properties are cheaper in Croydon
cons: you have to live in Croydon
You just need to consider your expectations. You’d have a hard time buying by yourself on £40k in Manchester forget in London. If you manage it obviously it would be in a less desirable location. That is the only thing that’s even approaching realistic.
At the moment what you’re saying might as well be that you want to buy a tropical island. Yeah you and me both…
It'll be gentrified eventually. Same was said about Camden or many other places couple of decades ago.
Wouldn't be surprised to see Camden following that path because that's all the people can afford today.
My thought too, capital growth in Croydon will be huge in a short span of time as soon as it tips over the hipster threshold. But it's a long way off from that point right now and so in the mean time you either have to live in Croydon, or deal with the kind of tenants who want to live in Croydon.
As I have yo say to my child, you can’t always get what you want.
You want to leave on your own in London on £40k a year? That just might not be possible.
So, look at your alternatives. What is the priority for you? Living in London? Living alone? Owning your property? If you can’t get all three, what must you drop to get the others.
And, something to consider, what is it that keeps you in London? Have you lived anywhere else?
I mean they live alone, in London, in a property they own. So none of the sacrifices you mentioned.
I just meant live at home to get a decent deposit and good budgeting once they have bought the property until their wages increase
I posted this on another thread a while ago. Might be an unpopular one on this thread but here’s my two pence worth.
Consider getting out of London. London will feel dull when you’re closer to 40 and your circle of friends starts to shrink because most of them realise that they’re not rich and being comfortable isn’t enough and start to move away where they can get more for their money, spend more time with family and friends and have less work pressure. Don’t get me wrong, I love London and was there for over 10 years but as you get older, you realise so many people have Peter Pan syndrome there.
I moved away, started a family, earn less than I was in London but live a significantly better lifestyle. I’m within an hours drive to some incredible outdoor spaces, I’m able to spend a lot of time with my little one as I’m not sat on the tube or running from one side of the city to the other multiple times a week. I miss the nightlife, the food scene and bars etc but it’s a small sacrifice. I have friends I can actually spend quality time with away from bars and pubs because we all have properties big enough. We’re not crammed into someone’s flat or shared house.
Sounds like you still have a good few years of London fun left in you. My advice would be to enjoy it but don’t rule out life outside of London just yet.
that's a great idea!! these days I do wonder if the London life is for me, it doesn't feel like it used to. I guess that's why many of my friends have left already
For me it started to sink in when I went to visit friends who had moved away. I owned a pretty nice apartment but it cost me close to 300k. I went to visit a friend and his family who moved to a small village up in the Peak District and I was envious of their house. They paid just over 350k but had 3 double bedrooms, a big garden, office space, dining room and were walking distance to beautiful, open green space. The village was full of nice local people and him and his wife looked visibly younger. They worked less, commuted less and got more time to relax and unwind. A year later, I moved away.
I wasn’t broke in London but I realised that if I ever wanted what they had in London, I’d need to at least double my salary. And guess what comes with a high salary? A high, often stressful work load.
Yeah I think if you are saying stuff like this you may not be as 100% committed to London as you think. I'd recommend taking a few trips to other cities - I will be buying in London this year but I'm in my late twenties and my career is incredibly London oriented, however I think closer to late 30s/early 40s we will relocate too as I anticipate I'll be seeking something more relaxed.
If you have 40K saved already you’re doing really well. Go find out what the bank might lend you?
It’s hard though. I didn’t buy a house in London until I was 45.
https://www.barclays.co.uk/mortgages/mortgage-calculator/borrowing-calculator/
Sounds to me like you’re well on track and don’t need advice?
£50-55k for a deposit and you’re golden. You will have to live in Zones 5-6, but assume you’re aware.
You don’t need advice - you need patience, and to continue saving.
For reference, my girlfriend earns £120k a year and is lucky she bought her place a few years ago for £400k.
Banks will lend about 4.5x your salary, so you're looking at about £180k mortgage. What's the price of the place you're looking at? You'll need £120k deposit to get a £300k flat.
Any other ways of increasing your deposit? Share/live with family for a bit?
Haven't you just given an example that basically agrees with the person you're replying to? Your brother got a mortgage of 4.75x salary. If he'd have wanted to buy a 300k place he would have needed £110k deposit.
Where and what did your brother buy for 230k?
I think it was more the comment that their girlfriend was on £120k (an insanely high salary for most people) but was ‘lucky’ to buy as a ‘reference’. Not really a useful reference for OP as it makes it sound like that the level of salary needed to buy. That’s a top 99% salary, OP is likely never going to make even close to that. Even half of that salary is far beyond the national average.
He bought a decent size 1 bed in zone 6
OK totally agreed the pretext about his partner making that much has zero to do with OP and isn't useful (and oddly braggy? Even though it's not his salary).
Where in London did he find a 230k flat for? The maths I used still adds up - roughly 4.5 X salary. You also need to remember that the take-home for 120k is not treble that of a person earning 40k.
You made it sound like you needed a 120k salary to get on the market, a salary many of us will NEVER get close to. Remember the average salary in the uk is £35k!
Zone 6 has flats for 230k mark
I am on about 36k a year pro-rata, but in contracts so I'm not guaranteed to be in employment year-round. I do get 12% added to my salary in lieu of holiday pay, but I don't take holidays when I have work going on so it sort of balances out.
I have a set amount I try to save, been back in the UK for 3 years now. Still not going to get anywhere unless someone passes away or I win premium bonds (I don't do lottery)
To be honest your salary is low for buying a London property. How much will your salary go up to in the next few years? Ideally you need to be looking at min 60-80k to buy a 1 bed flat in London.
And there are 1 bed flats in zone 6 in the 210-250k price range. So 4.5x plus a 40k deposit puts you in that range.
Because of my age bracket people have just started buying, all have been within the last 12 months.
What does partner say in all this?
Unfortunately, on your current salary it’s pretty much unfeasable as it stands. If you could double up with your partner, then it certainly opens doors.
Will you think the same in 10-20-30 years time? London is an incredible place when you’re a young party animal. It can get a bit much when you’re not such a young sitting in your dressing gown on a Saturday night animal.
Well we haven't spoken about buying somewhere together, at least for now. We are still both young so we were thinking maybe renting somewhere together at some point and figuring things out from there.
I've always been the person who wants something of my own, although I love him, I want to buy my own place if that makes sense. I don't mind waiting for a longer time.
Would you both live in this place? Or only you?
If you buy together you will have many more options (I assume your partner has an income - is it similar to yours?).
it'll just be me if I buy soon! i guess that's why it's better for me just to keep saving for the future, since we may end up just wanting to buy together
If you'd want to buy together soon it probably doesn't make sense to buy on your own before then, buying and selling is time consuming and expensive. Especially considering the discount you get on Stamp Duty as a first time buyer.
Assuming they earn about as much as you do, your budget will double, giving you a lot more options.
I’m confused, you say house in the title but then say you’d feel safer in a flat?
On your salary, depending on whether you’re expecting your earnings to increase dramatically, I’d look at something like a shared ownership scheme.
I did this around 10 years ago when I was earning about the same as you, and I got a brand new flat in Greenwich that I no way would I have been able to afford with a mortgage at the time.
Sorry I don't even know what I meant by that. I was looking at buying a flat as another option, but I didn't want to get into a shared ownership scheme and pay for service charges etc. so I thought buying a house would be more beneficial for me.
Was the shared ownership a good thing in the end? would you do it again? id like some advice on that route if possible please. thank you!
There are pros and cons for sure, and service charge is one of them. But you’ll likely get that on most new builds nowadays.
As long as it’s a reputable shared ownership provider (these are easy to suss out on Google) then you will get a beautiful flat in a decent part of London.
The downside is that unless you expect your salary to increase in future, you may not be able to staircase to 100% ownership (unless say your partner decided to join you in a mortgage in the future).
The rent + mortgage worked out at just a little more than I was paying for a room in London at the time.
Worth researching more into!
Flats are more likely to be affordable than houses in your price range and most flats are not in shared ownership schemes so that's not necessarily an issue.
Your salary, with no long term loan/credit agreements and no dependants, with GREAT credit score, will get you a £165,000 mortgage TOPS. Debts, missed payments, loans, high credit card utilisation percentages will drop that amount hugely.
Don't take our word for it that your expectations are out of whack with reality. Go on Rightmove RIGHT NOW and look up what £195,000 will buy you in London (yeah, you'll need an extra £10,000 for legal costs, conveyancing fees, furniture to get started I'm your new home if it's in good condition, a lot more if not...).
Also, you take out a £160,000 mortgage at current interest rates, on a 30 years term, look up the repayment for that. And that's NOT including utilities, service charges/ground rent (if you buy a flat), additional service charges if you buy a new build, your general living costs. You'll have to budget at least £2,000 a month, minimum, for London living.
So yeah, don't take our word for it. Go to Rightmove and they'll also give you a mortgage repayment estimate too. Very useful site.
Look to get a foot on the property ladder outside of London. Or consider buying with other people- maybe friends, siblings, relatives.
I'm in a similar position, was a lifelong Londoner until my late 20s and know that I won't be able to buy a London property for a very long time if ever.
Good luck!
Here’s what I would do in your situation, it will require some sacrifice but in the long run probably works out nicely.
First, I would wait until interest rates are in a better place (sub 3.5% at least).
Then consider buying in an area which has not yet been gentrified but is right on the cusp of it and Tottenham is a pretty good example of this at the moment.
The club are buying up properties all over the place as they spearhead massive regeneration that will transform the area and no doubt make it far more trendy and attractive than it currently is.
This will add great value in the long run to your property, and if the club need it to build a facility of their own you’re laughing as you can sell it above market value.
I’d also look into a fixer upper and get my hands a bit dirty in order to maximise my investment.
3-4 years later you will be laughing.
I did a similar thing buying a house in a struggling area of Barnet years ago. Made nearly £300k in 4 short years having bought for £455k.
There are 1 bedroom places in Tottenham for £150k incidentally that need a bit of work.
If Tottenham ain’t your thing you might want to consider Enfield, but that’d be a slower burn with no real huge economic driver at the moment.
And OP also - in a lot of places that aren't on the cusp of regeneration, a lot of the times flats just simply do not really increase in value in London much anymore. Buying in an up and coming area that is set to be more gentrified in the coming years is the way to go if you want a flat that actually increases in value (houses a bit different, but they are more expensive). Tottenham seems like a good area for this as there's solid indications of what is coming to that area.
I find in London, places even a tube stop or two away can have drastically different prices for property simply due to how 'trendy' the area is. Going for a non-trendy area that has potential is the way to go IMO.
£40k is like £2600 net per month.
The rule of thumb is to spend 1/3 in rent/ mortgage, so \~£900
If you take, for example £250k loan at 2.5% (currently more than double) it will take you 35 years paying £894 a month (https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/)
So such a salary is quite low for London, honestly. But doesn't prevent you to start if you have expectations of moving up in salary.
thank you! honestly what i earned before was ridiculous that's why I decided to move somewhere else until they matched the salary. if i don't get a pay rise in the next year or two I'll definitely leave and go somewhere else
Would honestly recommend looking now just to see what is out there. Could really help when it comes to mortgages and building your deposit.
In my experience, the biggest raises tend to come from job hopping.
Have you thought about Liverpool? We have everything London has but less crime, cleaner air, obviously not as huge of a jobs market, but the cost of living and house prices especially make London look like Hong Kong.
I’d love to live in Liverpool (my family is from there) but the jobs market really is the thing that stops me. In London in my field i can get £80-90k but in Liverpool the jobs im looking at pay more like £35-£40k. Day to day cost of living may be lower but it really doesn’t make up for that differential. Plus, flights and holidays cost the same wherever you live
... What even is that, how does one get into it, are you employed by them directly or in a consultancy or self employed?
I'm 30 now on £38k in tax and I keep noticing I have ridiculously good English compared to sooo many folks, so many jobs I think "I could do that" I just don't want to take a pay cut to start over and my current job is super safe. I don't have the soft skills (networking, subtle social cues, I'm well spoken and can pass as "polished", but I'm a mildly autistic socially awkward introvert with the emotional maturity of a teaspoon) to feel confident in going out on my own.
Strategic communications is sort of like another broader term for public relations. Specifically what I do is public policy consultancy which is helping companies to determine what their position should be on certain political or policy issues, and how they communicate these to their customers, to the public or to governments. I work for a consultancy and have the companies as clients, but there are also people who work directly for the company.
There are lots of companies that do this kind of work, you can just join at the bottom and work your way up. The salary isn’t great when just starting out though as you mostly learn on the job.
Soft skills are extremely important for this kind of job, as is understanding how other people think and feel about lots of different things. It involves talking to lots of different people regularly. So based just on how you’ve described yourself, you may find that this isn’t the type of job for you.
Manchester's more expensive and definitely more like London in the sense of the size of the city and jobs market. They're both great and have a lot to attract young people (I joined a queer running club when I moved to Liverpool just as an example so I had a social life through that). It's my home city so obviously I'm biased but: walkable victorian.docks, theatres, Georgian buildings, 3 unis, metro, walkable and pedestrianised city centre, modern shopping (Liverpool One), independent retail (Bold St), 2 cathedrals, 2 Premier League football teams, sooo much night life choice, several Michelin star restaurants, museums up the wazoo, it's the number 2 cruise destination and general tourist destination after London, parks everywhere (Sefton, Princes, Croxteth, Chester zoo, Liverpool Eye, M&S Bank arena (about as big as Wembley arena *not* stadium), Taylor Swift is playing at one of our football stadiums, overall good NHS and education coverage, ample decent commuter towns (Ormskirk, Southport, Wirral, along the train lines to Prescot/Speke), 2 1/2 hours to euston, plenty of gyms... 5G in the city center now... And we're on the coast so the air tends to be cleaner than inland.
This is fantasy. You’re living in a dream land. The average London house is £720k. You would be hard pushed to find a 3 bed for less that 400-450k in a less than desirable area. You would be lucky to even get something in Thornton heath. The biggest problem is your salary. You won’t be able to get a £360k mortgage. If your partner has a decent income, maybe you can buy together. That is the only realistic option. Or you go for a two bed outside of London.
Almost all the comments here say you can't achieve this on your salary (I dont disagree) yet there are so many full time positions that pay less than 40k and people are supposed to just accept it... it's insane.
And the move away/get a better job answers don't work because if everyone took that advice then the positions wouldn't be filled and the city wouldn't be able to function.
P.s. the only ways I know of to be able to buy property are
- Have a high salary/be wealthy/inheritance
- Share the purchase with a partner so you have dual incorms and thus higher borrowing potential
Single people with average or below income/wealth are screwed.
My advice to anyone in London is that unless your salary is £75-100k by the time you’re in your very early 30’s (and will be looking at having a partner earning the same bring household to £150-200k), then it’s best not to be in London as you’ll always feel more poor than rich. Plenty of cities that offer fantastic lives around the world that are a much better value prop than London. Terrible salaries and high taxes make it a very sucky prospect unless you can earn well.
Best advice - get out of London. Maybe you’ll take a pay cut finding a job elsewhere but income vs cost of living, you’ll likely be much better off (and safer!). Many great towns up north with great career opportunities.
I'm in marketing and currently working as a marketing manager for a software company. im 26 with over 7 years experience and have been in the same job for 4 years.
i was meant to leave last December but my company matched my new salary and kept me. im the only one who does my role as our product is very niche so i have a potential chance of leading my own team when we expand to the USA.
i see potential for another increase next year. and have bachlors in marketing too
Well marketing you could work from anywhere with todays world of remote working. Tbh I know this is off topic, but I suspect you could get a pay correction by moving company’s anyway, in or out of london. The reason I say correction, is because I have a suspicion you’re currently underpaid. Anything with the word ‘manager’ at the end of it, whether that be people or workload manager (eg project manager), tends to demand a salary of atleast 50k+.
But anyway, Cheshires good, some places in Staffordshire, greater Manchester. All cheap, depending on the district of course, and much safer than london! Best of luck with your journey.
Well you could take a drop in salary to £30k and be able to afford to buy an actual house here in east midlands by yourself, and live better than on £40k in London in some damp flat in zone 6.
Yeah honestly in most places unless you have a huge premium on your salary for being in London you are typically better off with a lower salary elsewhere.
For my job (law), there is atleast 40% higher salaries to work in London so is worth it. If it was only 10 - 20% more, I'd be better off in basically any other city.
One thought - it's said that people who stay in a job because their employer matched a competing job offer's salary usually leave within a year anyway.
I spend like a day in London a month and have never understood the appeal of living there full time unless you're super rich. For people in situations like OP, I feel like the general standard of living is way higher in the outskirts of other towns and cities.
It depends on your lifestyle I guess. I enjoy the culture, museums, theatres, vast array of shops of everything you could ever imagine, restaurants from all over the world, different cultures, career opportunities, excellent parks, and “global” feeling of London. I guess it’s not for everyone.
You're remote? Lol get out of London. Manchester, Liverpool, Leeds, etc will give you decent job options if you need to switch and much cheaper housing.
I really want a unicorn, but if I dig deep down I realise this isn’t possible.
If you have already realised that what you want isn’t possible then just because you want it doesn’t make it feasible!
Readjust your plans to something attainable.
As others have said, you need to look outside of London. If your job can be done remotely, there is no need to live anywhere near London and you will build wealth at a far faster rate living far up north for the next decade. If you have to work in London, I would suggest finding a commuter town and factoring in the cost of a season ticket. The main thing is to avoid renting at all costs.
This map can help find 'good value' areas to move to. The darkest red areas will generally have the lowest prices
[https://mapmaker.cdrc.ac.uk/#/index-of-multiple-deprivation?d=11110000&m=imde19\_rk&lon=-0.1086&lat=51.5287&zoom=8.49](https://mapmaker.cdrc.ac.uk/#/index-of-multiple-deprivation?d=11110000&m=imde19_rk&lon=-0.1086&lat=51.5287&zoom=8.49)
I don’t think it’s impossible as long as you compromise, adjust your expectations- and stay at your parents as long as possible saving the entire amount that you aren’t spending on living elsewhere. Realistically with London rents that is at least half your salary (minus any contributions to your parents that you are paying of course). If you set that amount to transfer into savings automatically after payday same as your rent would you should be able to put a lot away. That puts you in the best possible position to buy (probably after you get to the next level up at work or change jobs for a higher salary).
Purchase a flat first - possibly a second hand shared ownership property - somewhere that is reasonably priced for London. Then staircase the rest.
I know plenty of people who were on £40k a few years ago who are looking to buy or have bought now in London after moving up in salary a bit - it’s doable if you are able to save.
What do you want in life?
Why do you want to live in London? Is your chosen career in London and nowhere else? Are all your family and friends in London?
Are there opportunities you could pursue elsewhere in the country?
You can get a mortgage on roughly 4.5 times your salary. So £180k + £40k you've saved is £220k. Are there properties for that price in London?
For more accurate figures speak to a mortgage advisor, either independent or just at your bank. They will be more than willing and will only take 15-20 mins to get a decent enough understanding.
£220k would probably be top end though and you'd want to make sure you can actually afford that and that you can actually without your entire wage going on mortgage and bills. It would be worth looking at bill costs too, if you have never lived on your own - council tax, house insurance, utilities, water, any extras that you may be entitled to pay for living in flat block etc.
I would be more comfortable borrowing more like 3.5 x my salary but that brings it down to £180k which I doubt is going to get you anything in London. So options are save more or consider cheaper areas
How old are you? If you’re in your early 20s with £40k in savings and on £40k a year then you probably will be able to in around a decade if you keep saving and have substantial salary increases. If you’re in your 40s then that ship has probably already sailed and you’d be better looking around the commuter belt.
Let me take my calculator out. 4.5x £40k = £180K + £40K = £220k total budget excluding legal fees in a best case scenario.
Can you find anything on Rightmove for that budget? No me neither.
Your property purchasing options are a studio flat in Zone 6 or a house in Manchester.
Or you can just keep saving and work on promotions and pay rises
That's true, but it's about the salary not the 40k deposit.
1 bed flat where I live is £215,000 minimum, with 40k deposit I'd need a salary of £44000, which is far off for me. Also for those who have jobs or family or kids.
We didn't ask to be born into London. So sorry but 40k in London isn't lot
The way to get a bump up next year is to job hop, don't stay in the same place, and just hope they'll volunteer to give you more money. Take advantage of being in the place with the most career opportunities in the UK without the downside of awful rent costs and MOVE jobs, it's literally the only way to up your salary and afford to buy a place. (From someone who went from 22k to 80k in 3 years of working in London by hopping jobs).
40k is the absolute minimum if you want to buy a 1 flat bed around Greater London, plus the legal fees you need about 45k saved and that’s assuming you have a good salary >40k (ideally over the 50k mark) which is difficult to do young
Realistic options for you:
- Start a business
- move to another country
Why?
Either you need to increase how much money you make or you need to increase how much the money you make is worth.
If you start a business (solve a problem for a large group of people) you will generate more than 40k and hopefully more than enough to buy a house in a shorter period.
If you move to another country where everything is cheaper but you manage to keep your current income through remote work then you’ll probably be able to afford a house much faster
Your other option is to save… which will make it possible to buy a home but only once you’re late in life
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My advice is to manage your expectations. Many people want a house in London, a place of their own etc. but with a 40k salary that is just very unrealistic, unless you're looking at a flat in Zone 6 and even then.
thank you! do you think i should just keep focusing on saving for now?
yes, keep saving and find ways to increase your skill set which you can then utilise to negotiate higher pay. I have friends earning £100k+ in London who still feel like they can't afford a property in London by themselves.
okay thank you so much! i think London prices are just insane 😭😭 maybe I should leave after all
IMO you may be better served in another city - on a £40k salary sounds like you aren't really getting the London premium, and may have a similar salary elsewhere but with way more buying power.
There are many other nice parts of the country to live. Maybe explore a bit and see if any of them suits you?
Yes, leave
I earn over 100k and work on London, a while back I looked into buying a pied a terre (2 bed flat and rent out 1 room) but the issue was most of the affordable flats were in dodgy areas. It's even worse when you are talking family properties. With the rise of WFH/hybrid working I've given up on that idea.
Which how high service charges are in London, I'm not surprised.
This has absolutely nothing to do with service charges, and everything with the fact that you pay the same for a 2 bed flat as you would for a 5 bed mansion in other parts of the country.
True, but add £8k of service charges on top of the price of the house and it starts to also have something to do with service charges. I know a lot of people who don't pay that in mortgage yearly. Not in London of course.
OP, I bought my place in zone 4 on £42.5k but I had double your deposit. And it's a 2 bed flat, nowhere near a house. A friend of mine bought her place on the same salary, but it was a 1 bed shared ownership flat in zone 2. There are ways to become a homeowner on youe salary, but very few ppl start with a house. Aim for a starter home - a 1 bed flat or maybe even 2 bed further out, but be prepared to save more or move further out to achieve your dream of having your own place. And bear in mind that potentially a new government could result in new ways to achieve home ownership in the near future.
Saving will never hurt - "worst case" you're sitting on a pile of cash that you can eventually use towards retirement plans.
Yes. It is a lot easier to buy with a partner too, but I do understand wanting to buy on your own if not married (though most people I know ended up just buying with their partner unmarried as it was too expensive to do so alone, and they were on higher salaries than £40k). I have a friend on a similar salary to you who bought through shared ownership in Croydon - that isn't for everyone but his attitude was he just wanted to get on the ladder and preferred it to renting. I also know another friend who bought with her girlfriend in Brentwood on the Elizabeth Line and it was a lot more feasible for them there. So there's options, but you don't necessarily need to rush into those options if you're happy at the moment. Do you see your salary increasing in the future at all? IMO your salary is potentially too low to consider buying alone in London at the moment outside those options listed above (shared ownership or moving outside on a commuter line) but could work a lot better for you in some other cities, but understand wanting to stay in London.
When you say saving, how exactly are you keeping your money?
Frankly, saving is futile. In the last 10 years, the average property in London has risen from £361k to £499k. That's £1,115 per month. There is every reason to believe the same growth will happen in the next ten years, as the fundamentals (demand Vs supply) are unchanged, and that includes a long period (2018 to present) where there has been next to no growth in price. So you'd need to be saving £1,115 per month to be standing still. That's just not possible on 40k, and buying is getting further out of reach. The only answer is to earn more. The bottom line is quite simply you cannot buy a property on 40k in London. Rather than saving you'd be better off looking for ways to get promotions, move industries, more skills, diplomas, certificates etc. Even if it costs you money in the short term, saving isn't the solution.
Maybe, but it's worth mentioning since 2017 it's only up about 24k total, and flats have stagnated in value or even fallen.
I live in Zone 6 and OP's budget might get him a studio here
I'd say, consider moving out of London. You don't have to go prohibitively far out. Places like Chelmsford in Essex, or Reading are only 30 mins or so into London on the train, with trains running late into the night so you don't have to give up your London life and friends etc. But houses/flats out there will be a lot less expensive/accessible. You should check it out.
that's a great idea!! i haven't explored much out of London so I should definitely see my options
You should probably explore outside London before deciding that you can't see yourself living anywhere else :D
To add to this, Milton Keynes as well, not as nice as Reading imo, but decent (30-35min) trains to and from Euston, and you can absolutely buy a flat on 40k with 40k savings (within walking distance of the station).
talk to a mortgage broker to understand how much you'll be able to borrow consider moving to Croydon pro: properties are cheaper in Croydon cons: you have to live in Croydon
we live near Croydon and I want to avoid it haha!
You just need to consider your expectations. You’d have a hard time buying by yourself on £40k in Manchester forget in London. If you manage it obviously it would be in a less desirable location. That is the only thing that’s even approaching realistic. At the moment what you’re saying might as well be that you want to buy a tropical island. Yeah you and me both…
hahahah! thank you for the advice
and thank you
That pretty much sums up everywhere in London.... Pro, it's cheap. Con, it's cheap for a reason.
lol Croydon, the absolute pits of London
I love Croydon. Might be a shithole, but it’s my shithole.
Thank you for this valuable comment. I got out of Croydon years ago. You will not say this when you get out
It'll be gentrified eventually. Same was said about Camden or many other places couple of decades ago. Wouldn't be surprised to see Camden following that path because that's all the people can afford today.
My thought too, capital growth in Croydon will be huge in a short span of time as soon as it tips over the hipster threshold. But it's a long way off from that point right now and so in the mean time you either have to live in Croydon, or deal with the kind of tenants who want to live in Croydon.
As I have yo say to my child, you can’t always get what you want. You want to leave on your own in London on £40k a year? That just might not be possible. So, look at your alternatives. What is the priority for you? Living in London? Living alone? Owning your property? If you can’t get all three, what must you drop to get the others. And, something to consider, what is it that keeps you in London? Have you lived anywhere else?
Thank you! I don't think I've considered my priorities yet... i need to think more about what is more important
Know a few people that have done it, with sacrifice it’s possible
As I says, sacrifices might be needed.
I mean they live alone, in London, in a property they own. So none of the sacrifices you mentioned. I just meant live at home to get a decent deposit and good budgeting once they have bought the property until their wages increase
But do they live alone, in London, owning their home, on £40k income and started in 2024?
Yes, I know multiple people that have done this in the 40-48k income bracket
Move out of London?
I posted this on another thread a while ago. Might be an unpopular one on this thread but here’s my two pence worth. Consider getting out of London. London will feel dull when you’re closer to 40 and your circle of friends starts to shrink because most of them realise that they’re not rich and being comfortable isn’t enough and start to move away where they can get more for their money, spend more time with family and friends and have less work pressure. Don’t get me wrong, I love London and was there for over 10 years but as you get older, you realise so many people have Peter Pan syndrome there. I moved away, started a family, earn less than I was in London but live a significantly better lifestyle. I’m within an hours drive to some incredible outdoor spaces, I’m able to spend a lot of time with my little one as I’m not sat on the tube or running from one side of the city to the other multiple times a week. I miss the nightlife, the food scene and bars etc but it’s a small sacrifice. I have friends I can actually spend quality time with away from bars and pubs because we all have properties big enough. We’re not crammed into someone’s flat or shared house. Sounds like you still have a good few years of London fun left in you. My advice would be to enjoy it but don’t rule out life outside of London just yet.
that's a great idea!! these days I do wonder if the London life is for me, it doesn't feel like it used to. I guess that's why many of my friends have left already
For me it started to sink in when I went to visit friends who had moved away. I owned a pretty nice apartment but it cost me close to 300k. I went to visit a friend and his family who moved to a small village up in the Peak District and I was envious of their house. They paid just over 350k but had 3 double bedrooms, a big garden, office space, dining room and were walking distance to beautiful, open green space. The village was full of nice local people and him and his wife looked visibly younger. They worked less, commuted less and got more time to relax and unwind. A year later, I moved away. I wasn’t broke in London but I realised that if I ever wanted what they had in London, I’d need to at least double my salary. And guess what comes with a high salary? A high, often stressful work load.
thank you
Yeah I think if you are saying stuff like this you may not be as 100% committed to London as you think. I'd recommend taking a few trips to other cities - I will be buying in London this year but I'm in my late twenties and my career is incredibly London oriented, however I think closer to late 30s/early 40s we will relocate too as I anticipate I'll be seeking something more relaxed.
You should be able to find 1-bed flats (on the open market - no need for part-buy schemes) in South East London within your current budget
thank you! I did see some actually
If you have 40K saved already you’re doing really well. Go find out what the bank might lend you? It’s hard though. I didn’t buy a house in London until I was 45. https://www.barclays.co.uk/mortgages/mortgage-calculator/borrowing-calculator/
thank you for the advice!! and congratulations, i guess I shouldn't rush things
Sounds to me like you’re well on track and don’t need advice? £50-55k for a deposit and you’re golden. You will have to live in Zones 5-6, but assume you’re aware. You don’t need advice - you need patience, and to continue saving.
Thank you!
Well done, btw! Not many people have £40k in their account.
thank you so much!
For reference, my girlfriend earns £120k a year and is lucky she bought her place a few years ago for £400k. Banks will lend about 4.5x your salary, so you're looking at about £180k mortgage. What's the price of the place you're looking at? You'll need £120k deposit to get a £300k flat. Any other ways of increasing your deposit? Share/live with family for a bit?
This is a tad exaggerated. My brother has just bought a 230k flat in London. £40k deposit, £40k salary
Haven't you just given an example that basically agrees with the person you're replying to? Your brother got a mortgage of 4.75x salary. If he'd have wanted to buy a 300k place he would have needed £110k deposit. Where and what did your brother buy for 230k?
I think it was more the comment that their girlfriend was on £120k (an insanely high salary for most people) but was ‘lucky’ to buy as a ‘reference’. Not really a useful reference for OP as it makes it sound like that the level of salary needed to buy. That’s a top 99% salary, OP is likely never going to make even close to that. Even half of that salary is far beyond the national average. He bought a decent size 1 bed in zone 6
OK totally agreed the pretext about his partner making that much has zero to do with OP and isn't useful (and oddly braggy? Even though it's not his salary).
Where in London did he find a 230k flat for? The maths I used still adds up - roughly 4.5 X salary. You also need to remember that the take-home for 120k is not treble that of a person earning 40k.
You made it sound like you needed a 120k salary to get on the market, a salary many of us will NEVER get close to. Remember the average salary in the uk is £35k! Zone 6 has flats for 230k mark
What are you earning?
I am on about 36k a year pro-rata, but in contracts so I'm not guaranteed to be in employment year-round. I do get 12% added to my salary in lieu of holiday pay, but I don't take holidays when I have work going on so it sort of balances out.
oh god!! im still at my parents house and have no plans to move out anytime soon, I currently try to save £1k per month
I have a set amount I try to save, been back in the UK for 3 years now. Still not going to get anywhere unless someone passes away or I win premium bonds (I don't do lottery)
i hope you do!
To be honest your salary is low for buying a London property. How much will your salary go up to in the next few years? Ideally you need to be looking at min 60-80k to buy a 1 bed flat in London.
This is incorrect, I know multiple people who have bought flats around Greater London in the 40-50k bracket
Recently? 50k x 4.5 = max property price of £225k
And there are 1 bed flats in zone 6 in the 210-250k price range. So 4.5x plus a 40k deposit puts you in that range. Because of my age bracket people have just started buying, all have been within the last 12 months.
I think I might be able to get up to 60k in the next 2-3 years. i was on 32k up until January because i had another offer that my company matched
Brother just bought in London with the exact same stats. £40k deposit and £40k salary (although can do overtime when needed). Zone 6, 1 bed flat
oh wow!!! how much loan was he able to get?
£180k
What does partner say in all this? Unfortunately, on your current salary it’s pretty much unfeasable as it stands. If you could double up with your partner, then it certainly opens doors. Will you think the same in 10-20-30 years time? London is an incredible place when you’re a young party animal. It can get a bit much when you’re not such a young sitting in your dressing gown on a Saturday night animal.
Well we haven't spoken about buying somewhere together, at least for now. We are still both young so we were thinking maybe renting somewhere together at some point and figuring things out from there. I've always been the person who wants something of my own, although I love him, I want to buy my own place if that makes sense. I don't mind waiting for a longer time.
Would you both live in this place? Or only you? If you buy together you will have many more options (I assume your partner has an income - is it similar to yours?).
it'll just be me if I buy soon! i guess that's why it's better for me just to keep saving for the future, since we may end up just wanting to buy together
If you'd want to buy together soon it probably doesn't make sense to buy on your own before then, buying and selling is time consuming and expensive. Especially considering the discount you get on Stamp Duty as a first time buyer. Assuming they earn about as much as you do, your budget will double, giving you a lot more options.
thank you!
I’m confused, you say house in the title but then say you’d feel safer in a flat? On your salary, depending on whether you’re expecting your earnings to increase dramatically, I’d look at something like a shared ownership scheme. I did this around 10 years ago when I was earning about the same as you, and I got a brand new flat in Greenwich that I no way would I have been able to afford with a mortgage at the time.
Sorry I don't even know what I meant by that. I was looking at buying a flat as another option, but I didn't want to get into a shared ownership scheme and pay for service charges etc. so I thought buying a house would be more beneficial for me. Was the shared ownership a good thing in the end? would you do it again? id like some advice on that route if possible please. thank you!
There are pros and cons for sure, and service charge is one of them. But you’ll likely get that on most new builds nowadays. As long as it’s a reputable shared ownership provider (these are easy to suss out on Google) then you will get a beautiful flat in a decent part of London. The downside is that unless you expect your salary to increase in future, you may not be able to staircase to 100% ownership (unless say your partner decided to join you in a mortgage in the future). The rent + mortgage worked out at just a little more than I was paying for a room in London at the time. Worth researching more into!
Okay great! I'll look more into it, thank you so much you've helped me !
Flats are more likely to be affordable than houses in your price range and most flats are not in shared ownership schemes so that's not necessarily an issue.
Your salary, with no long term loan/credit agreements and no dependants, with GREAT credit score, will get you a £165,000 mortgage TOPS. Debts, missed payments, loans, high credit card utilisation percentages will drop that amount hugely. Don't take our word for it that your expectations are out of whack with reality. Go on Rightmove RIGHT NOW and look up what £195,000 will buy you in London (yeah, you'll need an extra £10,000 for legal costs, conveyancing fees, furniture to get started I'm your new home if it's in good condition, a lot more if not...). Also, you take out a £160,000 mortgage at current interest rates, on a 30 years term, look up the repayment for that. And that's NOT including utilities, service charges/ground rent (if you buy a flat), additional service charges if you buy a new build, your general living costs. You'll have to budget at least £2,000 a month, minimum, for London living. So yeah, don't take our word for it. Go to Rightmove and they'll also give you a mortgage repayment estimate too. Very useful site.
thanks so much!
Get married and buy a house together like 90% of homebuyers
that's true! id love this route too to be honest
Look to get a foot on the property ladder outside of London. Or consider buying with other people- maybe friends, siblings, relatives. I'm in a similar position, was a lifelong Londoner until my late 20s and know that I won't be able to buy a London property for a very long time if ever. Good luck!
thank you!
Here’s what I would do in your situation, it will require some sacrifice but in the long run probably works out nicely. First, I would wait until interest rates are in a better place (sub 3.5% at least). Then consider buying in an area which has not yet been gentrified but is right on the cusp of it and Tottenham is a pretty good example of this at the moment. The club are buying up properties all over the place as they spearhead massive regeneration that will transform the area and no doubt make it far more trendy and attractive than it currently is. This will add great value in the long run to your property, and if the club need it to build a facility of their own you’re laughing as you can sell it above market value. I’d also look into a fixer upper and get my hands a bit dirty in order to maximise my investment. 3-4 years later you will be laughing. I did a similar thing buying a house in a struggling area of Barnet years ago. Made nearly £300k in 4 short years having bought for £455k. There are 1 bedroom places in Tottenham for £150k incidentally that need a bit of work. If Tottenham ain’t your thing you might want to consider Enfield, but that’d be a slower burn with no real huge economic driver at the moment.
people have recommended this to me. thank you so much!
And OP also - in a lot of places that aren't on the cusp of regeneration, a lot of the times flats just simply do not really increase in value in London much anymore. Buying in an up and coming area that is set to be more gentrified in the coming years is the way to go if you want a flat that actually increases in value (houses a bit different, but they are more expensive). Tottenham seems like a good area for this as there's solid indications of what is coming to that area. I find in London, places even a tube stop or two away can have drastically different prices for property simply due to how 'trendy' the area is. Going for a non-trendy area that has potential is the way to go IMO.
£40k is like £2600 net per month. The rule of thumb is to spend 1/3 in rent/ mortgage, so \~£900 If you take, for example £250k loan at 2.5% (currently more than double) it will take you 35 years paying £894 a month (https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/) So such a salary is quite low for London, honestly. But doesn't prevent you to start if you have expectations of moving up in salary.
thank you! honestly what i earned before was ridiculous that's why I decided to move somewhere else until they matched the salary. if i don't get a pay rise in the next year or two I'll definitely leave and go somewhere else
Would honestly recommend looking now just to see what is out there. Could really help when it comes to mortgages and building your deposit. In my experience, the biggest raises tend to come from job hopping.
Have you thought about Liverpool? We have everything London has but less crime, cleaner air, obviously not as huge of a jobs market, but the cost of living and house prices especially make London look like Hong Kong.
I’d love to live in Liverpool (my family is from there) but the jobs market really is the thing that stops me. In London in my field i can get £80-90k but in Liverpool the jobs im looking at pay more like £35-£40k. Day to day cost of living may be lower but it really doesn’t make up for that differential. Plus, flights and holidays cost the same wherever you live
Can I ask what you do to earn that much?!?
Strategic communications/Public policy consultancy for corporates. It’s not actually a particularly high salary for London!
... What even is that, how does one get into it, are you employed by them directly or in a consultancy or self employed? I'm 30 now on £38k in tax and I keep noticing I have ridiculously good English compared to sooo many folks, so many jobs I think "I could do that" I just don't want to take a pay cut to start over and my current job is super safe. I don't have the soft skills (networking, subtle social cues, I'm well spoken and can pass as "polished", but I'm a mildly autistic socially awkward introvert with the emotional maturity of a teaspoon) to feel confident in going out on my own.
Strategic communications is sort of like another broader term for public relations. Specifically what I do is public policy consultancy which is helping companies to determine what their position should be on certain political or policy issues, and how they communicate these to their customers, to the public or to governments. I work for a consultancy and have the companies as clients, but there are also people who work directly for the company. There are lots of companies that do this kind of work, you can just join at the bottom and work your way up. The salary isn’t great when just starting out though as you mostly learn on the job. Soft skills are extremely important for this kind of job, as is understanding how other people think and feel about lots of different things. It involves talking to lots of different people regularly. So based just on how you’ve described yourself, you may find that this isn’t the type of job for you.
Shh, don't tell everyone!
Don’t have our families and friends
thank you for the recommendation! my boyfriend did mention Liverpool or Manchester
Manchester's more expensive and definitely more like London in the sense of the size of the city and jobs market. They're both great and have a lot to attract young people (I joined a queer running club when I moved to Liverpool just as an example so I had a social life through that). It's my home city so obviously I'm biased but: walkable victorian.docks, theatres, Georgian buildings, 3 unis, metro, walkable and pedestrianised city centre, modern shopping (Liverpool One), independent retail (Bold St), 2 cathedrals, 2 Premier League football teams, sooo much night life choice, several Michelin star restaurants, museums up the wazoo, it's the number 2 cruise destination and general tourist destination after London, parks everywhere (Sefton, Princes, Croxteth, Chester zoo, Liverpool Eye, M&S Bank arena (about as big as Wembley arena *not* stadium), Taylor Swift is playing at one of our football stadiums, overall good NHS and education coverage, ample decent commuter towns (Ormskirk, Southport, Wirral, along the train lines to Prescot/Speke), 2 1/2 hours to euston, plenty of gyms... 5G in the city center now... And we're on the coast so the air tends to be cleaner than inland.
This is fantasy. You’re living in a dream land. The average London house is £720k. You would be hard pushed to find a 3 bed for less that 400-450k in a less than desirable area. You would be lucky to even get something in Thornton heath. The biggest problem is your salary. You won’t be able to get a £360k mortgage. If your partner has a decent income, maybe you can buy together. That is the only realistic option. Or you go for a two bed outside of London.
… not live in London?
Almost all the comments here say you can't achieve this on your salary (I dont disagree) yet there are so many full time positions that pay less than 40k and people are supposed to just accept it... it's insane. And the move away/get a better job answers don't work because if everyone took that advice then the positions wouldn't be filled and the city wouldn't be able to function. P.s. the only ways I know of to be able to buy property are - Have a high salary/be wealthy/inheritance - Share the purchase with a partner so you have dual incorms and thus higher borrowing potential Single people with average or below income/wealth are screwed.
My advice to anyone in London is that unless your salary is £75-100k by the time you’re in your very early 30’s (and will be looking at having a partner earning the same bring household to £150-200k), then it’s best not to be in London as you’ll always feel more poor than rich. Plenty of cities that offer fantastic lives around the world that are a much better value prop than London. Terrible salaries and high taxes make it a very sucky prospect unless you can earn well.
Best advice - get out of London. Maybe you’ll take a pay cut finding a job elsewhere but income vs cost of living, you’ll likely be much better off (and safer!). Many great towns up north with great career opportunities.
thank you!! what places would you recommend?
It depends, what is your career path/ qualifications, e.g Finance, Engineering, healthcare etc?
I'm in marketing and currently working as a marketing manager for a software company. im 26 with over 7 years experience and have been in the same job for 4 years. i was meant to leave last December but my company matched my new salary and kept me. im the only one who does my role as our product is very niche so i have a potential chance of leading my own team when we expand to the USA. i see potential for another increase next year. and have bachlors in marketing too
Well marketing you could work from anywhere with todays world of remote working. Tbh I know this is off topic, but I suspect you could get a pay correction by moving company’s anyway, in or out of london. The reason I say correction, is because I have a suspicion you’re currently underpaid. Anything with the word ‘manager’ at the end of it, whether that be people or workload manager (eg project manager), tends to demand a salary of atleast 50k+. But anyway, Cheshires good, some places in Staffordshire, greater Manchester. All cheap, depending on the district of course, and much safer than london! Best of luck with your journey.
Well you could take a drop in salary to £30k and be able to afford to buy an actual house here in east midlands by yourself, and live better than on £40k in London in some damp flat in zone 6.
Yeah honestly in most places unless you have a huge premium on your salary for being in London you are typically better off with a lower salary elsewhere. For my job (law), there is atleast 40% higher salaries to work in London so is worth it. If it was only 10 - 20% more, I'd be better off in basically any other city.
One thought - it's said that people who stay in a job because their employer matched a competing job offer's salary usually leave within a year anyway.
I also want a Porsche 911 but can't afford it, what do I do?
😅😅😅
Move out of London. It's shit.
So you can live in some boring place where the ONLY thing to do is go on walks and sit in a pub?
I spend like a day in London a month and have never understood the appeal of living there full time unless you're super rich. For people in situations like OP, I feel like the general standard of living is way higher in the outskirts of other towns and cities.
It depends on your lifestyle I guess. I enjoy the culture, museums, theatres, vast array of shops of everything you could ever imagine, restaurants from all over the world, different cultures, career opportunities, excellent parks, and “global” feeling of London. I guess it’s not for everyone.
Studio in zone 6? You can get one for about 160k.
would that mean I'd have only shared ownership?
If it's small enough and far enough away, no.
You could afford a 4 bed house, but it'd be a hell of a commute
where? 😅 hahah I am remote anyways
Up North. I'm in Yorkshire. 3 bed semi, garden, drive.... I estimate it's worth £140k, and I'm being generous. Was £114k when I remortgaged 4yrs ago
oh my god, that's great! well done. is there a lot of do there? what's life like?
You're remote? Lol get out of London. Manchester, Liverpool, Leeds, etc will give you decent job options if you need to switch and much cheaper housing.
I really want a unicorn, but if I dig deep down I realise this isn’t possible. If you have already realised that what you want isn’t possible then just because you want it doesn’t make it feasible! Readjust your plans to something attainable.
As others have said, you need to look outside of London. If your job can be done remotely, there is no need to live anywhere near London and you will build wealth at a far faster rate living far up north for the next decade. If you have to work in London, I would suggest finding a commuter town and factoring in the cost of a season ticket. The main thing is to avoid renting at all costs. This map can help find 'good value' areas to move to. The darkest red areas will generally have the lowest prices [https://mapmaker.cdrc.ac.uk/#/index-of-multiple-deprivation?d=11110000&m=imde19\_rk&lon=-0.1086&lat=51.5287&zoom=8.49](https://mapmaker.cdrc.ac.uk/#/index-of-multiple-deprivation?d=11110000&m=imde19_rk&lon=-0.1086&lat=51.5287&zoom=8.49)
How old are you guys?
i am 26. he is 28
I don’t think it’s impossible as long as you compromise, adjust your expectations- and stay at your parents as long as possible saving the entire amount that you aren’t spending on living elsewhere. Realistically with London rents that is at least half your salary (minus any contributions to your parents that you are paying of course). If you set that amount to transfer into savings automatically after payday same as your rent would you should be able to put a lot away. That puts you in the best possible position to buy (probably after you get to the next level up at work or change jobs for a higher salary). Purchase a flat first - possibly a second hand shared ownership property - somewhere that is reasonably priced for London. Then staircase the rest. I know plenty of people who were on £40k a few years ago who are looking to buy or have bought now in London after moving up in salary a bit - it’s doable if you are able to save.
On that kind of money - 1 bed flat in Redhill Surrey. If you want a house, you might find a 1 bed starter house in Luton.
What do you want in life? Why do you want to live in London? Is your chosen career in London and nowhere else? Are all your family and friends in London? Are there opportunities you could pursue elsewhere in the country?
You can get a mortgage on roughly 4.5 times your salary. So £180k + £40k you've saved is £220k. Are there properties for that price in London? For more accurate figures speak to a mortgage advisor, either independent or just at your bank. They will be more than willing and will only take 15-20 mins to get a decent enough understanding. £220k would probably be top end though and you'd want to make sure you can actually afford that and that you can actually without your entire wage going on mortgage and bills. It would be worth looking at bill costs too, if you have never lived on your own - council tax, house insurance, utilities, water, any extras that you may be entitled to pay for living in flat block etc. I would be more comfortable borrowing more like 3.5 x my salary but that brings it down to £180k which I doubt is going to get you anything in London. So options are save more or consider cheaper areas
How old are you? If you’re in your early 20s with £40k in savings and on £40k a year then you probably will be able to in around a decade if you keep saving and have substantial salary increases. If you’re in your 40s then that ship has probably already sailed and you’d be better looking around the commuter belt.
There’s plenty of other places in the U.K. to live
Don’t buy a house in London. Buy a house in a commuter town / village.
Earn more money.
Let me take my calculator out. 4.5x £40k = £180K + £40K = £220k total budget excluding legal fees in a best case scenario. Can you find anything on Rightmove for that budget? No me neither. Your property purchasing options are a studio flat in Zone 6 or a house in Manchester. Or you can just keep saving and work on promotions and pay rises
40k saved and still living at home with parents?
yes, I have no plans on leaving yet. i save around £1k per month which I wouldn't have been able to do if I didn't stay 😅
What's 40k going to do?
Get a deposit down on your first home and start living your own life?
That's true, but it's about the salary not the 40k deposit. 1 bed flat where I live is £215,000 minimum, with 40k deposit I'd need a salary of £44000, which is far off for me. Also for those who have jobs or family or kids. We didn't ask to be born into London. So sorry but 40k in London isn't lot
yes 40k salary isn't...I was on £32k before and they only upgraded it to 40k because I had another job offer. i hope I can get a bump next year 😥
The way to get a bump up next year is to job hop, don't stay in the same place, and just hope they'll volunteer to give you more money. Take advantage of being in the place with the most career opportunities in the UK without the downside of awful rent costs and MOVE jobs, it's literally the only way to up your salary and afford to buy a place. (From someone who went from 22k to 80k in 3 years of working in London by hopping jobs).
40k is the absolute minimum if you want to buy a 1 flat bed around Greater London, plus the legal fees you need about 45k saved and that’s assuming you have a good salary >40k (ideally over the 50k mark) which is difficult to do young
Move North… it’s really nice up here. 😀
I will look into it thank you!
Realistic options for you: - Start a business - move to another country Why? Either you need to increase how much money you make or you need to increase how much the money you make is worth. If you start a business (solve a problem for a large group of people) you will generate more than 40k and hopefully more than enough to buy a house in a shorter period. If you move to another country where everything is cheaper but you manage to keep your current income through remote work then you’ll probably be able to afford a house much faster Your other option is to save… which will make it possible to buy a home but only once you’re late in life